The Sweet, Secret Life of Tootsie Rolls

The 116-year-old Tootsie Roll company is the the candy industry's biggest secret-keeper--a modern day Willy Wonka if you will, and the only thing missing from The Wall Street Journal's story today is Augustus Gloop. WSJ's Ben Kesling has your most enjoyable morning read with his look inside the candy empire. Granted, it's not a deep look, but it's as thorough as you're going to get when you're dealing with a company that doesn't speak to journalists, doesn't hold earnings calls, and is the most secretive company in the candy industry. Also, any article that incorporates the phrase "tightly controlled Tootsie Roll" is at least worth a skim (What? Some of us grew up in the 90s during the popular dance craze.).

The intrigue here is that Tootsie Roll, and its chairman, ninetysomething Melvin Gordon and his wife, Ellen, don't talk to anyone. "I think the only way you can get a tour is by jumping over the fence and sneaking in" an analyst told Kesling. Calls to the Gordons' daughter Karen Mills, who is the head of the U.S. Small Business Administration, weren't returned either. And that's been the case as far back as 1980, when the Milwaukee Sentinel also wrote about secretive the Gordons were, and how they never got fat despite eating pounds and pounds of candy, "We're high on candy, we nibble at it all day--both our and our competitors to see what they're doing---and our weight hasn't varied more than a few pounds in years," Ellen Gordon told the Sentinel some 32 years ago. Unfortunately there's no mention of Veruca Salt or a Chocolate River, but there's this:

Tootsie Roll's Chicago headquarters is a modern-day Willy Wonka factory. Massive puffs of steam billow out of humming machines on the roofs of the gray cinder block and red brick buildings, which sit surrounded by off-kilter "no trespassing" signs. The Gordons haven't granted an interview in years. The company declined repeated interview requests, saying "we have opted to use our quarterly earnings releases as a way to provide continuing updates to all business media at once."

While its operating profit margin has fallen by roughly half in the last decade, to 11% last year, Tootsie Roll's relatively steady success makes it a delicious proposition for potential buyers, said Mr. Pines [an owner of a consulting firm who worked with the company in the 80s].

It has $67 million in cash and maintains a dividend yield of over 1%. "That'd be a beautiful thing to buy," said Mr. Pines.